20th Feb 2025 06:57
(Alliance News) - London's FTSE 100 is called to open a touch higher on Thursday, in what could be its first gain of a tricky week so far.
IG says futures indicate the FTSE 100 to open 17.4 points higher, 0.4%, at 8,729.93 on Thursday. The index of London large-caps closed down 54.20 points, 0.6%, at 8,712.53 on Wednesday.
Federal Reserve officials in January agreed they would need to see progress on inflation before cutting interest rates further, and expressed concern about the impact tariffs will have in making that happen, minutes released Wednesday showed.
"Participants indicated that, provided the economy remained near maximum employment, they would want to see further progress on inflation before making additional adjustments to the target range for the federal funds rate," the minutes from the Federal Open Market Committee's January meeting said.
FOMC officials observed that the committee was "well positioned" to "take time to assess the evolving outlook for economic activity, the labour market, and inflation, with the vast majority pointing to a still-restrictive policy stance."
Supporting its decision, FOMC officials highlighted reduced downside risks to the outlook for the labour market and economic activity, increased upside risks to the outlook for inflation, and uncertainties concerning the neutral rate of interest, the degree of restraint from higher longer-term interest rates, or the economic effects of potential government policies.
At its January meeting, the Federal Open Market Committee left the federal funds rate range at 4.25%-4.50%. The vote was unanimous.
Capital Economics analyst Paul Ashworth commented: "The minutes of the Fed’s late-January policy meeting underline that, having cut rates by a cumulative 100bp, officials are in no hurry to resume loosening monetary policy, even though most still thought the current policy stance was restrictive."
Against the dollar, the pound perked up to USD1.2595 early Thursday, from USD1.2572 at the time of the London equities close on Wednesday. The euro rose to USD1.0430 from USD1.0409. Against the yen, the dollar faded to JPY150.06 from JPY151.62.
SPI Asset Management analyst Stephen Innes commented: "The yen is charging ahead, marching to the beat of its own drummer, while the rest of the G10 currency pack stumbles under the weight of dovish pivots. In a world where central banks are either hacking away at interest rates or clinging desperately to an easing bias, the yen is emerging as the clear outlier—the one currency with a legitimate path to appreciation. With the BoJ shifting cautiously toward more tightening and JGB yields rising, traders are finally waking up to decent re-rating."
The Dow Jones Industrial Average and S&P 500 each rose 0.2% in New York overnight, while the Nasdaq Composite edged up 0.1%.
The Nikkei 225 in Tokyo was down 1.3% in late trade, while the S&P/ASX 200 in Sydney lost 1.2%. The Shanghai Composite in China was down slightly, while the Hang Seng Index fell 1.3%.
China's central bank held its key lending rates steady on Thursday.
The People's Bank of China has maintained its one-year loan prime rate at 3.10%, in line with FXStreet-cited consensus, while the five-year LPR remains at 3.60%.
President Donald Trump on Wednesday suggested a trade deal was "possible" with China – a key target in the US leader's tariffs policy.
In 2020, the US had already agreed to "a great trade deal with China" and a new deal was "possible," Trump told reporters.
An ounce of gold rose to USD2,944.81 early Thursday, from USD2,925.48 at the time of the closing bell in London on Wednesday. A barrel of Brent faded to USD75.96 from USD76.41.
Thursday's economic calendar has US weekly initial jobless claims figures, also at 1330 GMT.
Thursday's UK corporate calendar has full-year results from British Gas owner Centrica, miner Anglo American, and high street lender Lloyds Banking Group.
By Eric Cunha, Alliance News news editor
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